Tesla Makes Reno a Critical Stop on Way to CES

As far as Tesla's concerned, what's happening in Las Vegas can stay in Las Vegas. The real action is some 400 dusty miles northwest, across the state in Reno.

A vehicle charger, right, stands in the lobby at the Tesla Motors Gigafactory in McCarran, Nevada. Credit: David Paul Morris/Bloomberg

The electric-car maker is seizing on next week's consumer electronics show to host investors and analysts at Gigafactory 1, the sprawling plant where it makes batteries and energy storage packs. Tesla Motors's invitation-only "investor event" will take place Jan. 4, as the tech and automotive industries swarm into Las Vegas for CES 2017. Though self-driving technology will be in the spotlight this year at CES, Tesla typically skips large industry trade shows, preferring to announce products separate from the pack.

"We are excited to see the scope and scale, not just of the facility itself, but in the levels of automation and potential advancements in manufacturing," said Joe Dennison, associate portfolio manager of Zevenbergen Capital Investments. Mr. Dennison said he's eager to learn more about Tesla Energy products and hear any updates on timing or battery-cost reductions ahead of the Model 3 introduction.

While visitors have to pay their own airfare and hotel costs, they'll get some time with Chief Executive Officer Elon Musk and Chief Technology Officer J.B. Straubel, according to guests who have received invitations. Tesla may need the good graces of Wall Street and investors this year as it spends heavily to expand production to 500,000 vehicles annually by 2018, some 10 times the number of vehicles delivered in 2015.

Battery Demand

The $5 billion Gigafactory 1 plant was born out of Tesla's massive need for lithium-ion batteries both for its vehicles -- including the Model 3 due in late 2017 -- as well as energy storage-devices such as the Powerwall. Tesla, in partnership with Panasonic, is working to collapse its battery supply chain and drive down costs. In its third quarter letter to shareholders, Tesla said "the Gigafactory remains on track to begin cell production later this year."

Reno has clawed its way back from the recession, embracing tech and the arts alike as the city sheds its image as a second-tier destination for gamblers and visitors to Lake Tahoe. The hope is that Tesla's gigafactory will attract other manufacturers and help to transform the region.

Mr. Musk has said that he expects the fourth quarter to be profitable. It will be the first earnings period that includes SolarCity Corp., the solar-panel installer it bought for $2 billion.

CES is heavy on autonomy this year and includes an opening keynote from Jen-Hsun Huang, the CEO of Tesla supplier Nvidia. Tesla's forthcoming Model 3 sedan will be equipped with hardware to enable full self-driving, and Mr. Musk hopes to showcase an autonomous cross country drive from Los Angeles to New York by the end of 2017.